Glossary

M - P

Moderate Income - A term used to describe household incomes that range between 80% and 120% of the area median income.

Mortgage Banker - An individual or company who originates, sells and services mortgages.

Mortgage Broker - An individual or company who brings borrowers and lenders together for the purpose of loan origination, but does not originate or service mortgages. A mortgage broker might also negotiate financing on behalf of the borrower.

Mortgage-Backed Security (MBS) - A security backed by a pool of mortgages, such as those issued by Ginnie Mae, Fannie Mae or Freddie Mac.

Mutual Fund - See Open-End Investment Company.

Net Assets - The difference between a fund or institution's total assets and total liabilities at a given point in time. Net asset value represents the value of equity shareholders' stake in the entity.

Net Operating Income (NOI) - For rental properties, the gross income from rent and other sources minus the vacancy allowance and operating expenses. Net operating income is the amount available for making loan payments (debt service) and paying investors (cash flow).

Net Returns - The returns to an investor after deducting management fees and expenses.

New Markets Tax Credit (NMTC) Program - The program was enacted in 2000 as part of the Community Renewal Tax Relief Act to stimulate economic growth in areas often overlooked by conventional investors by providing tax incentives to businesses and individuals that invest in low-income communities. Tax credits are allocated by the Community Development Financial Institution Fund (CDFI Fund) of the U.S. Treasury Department to certified CDEs for qualified low-income investment projects.

North America's Building Trades Unions (formerly Building and Construction Trades Department) - North America's Building Trades Unions Department, AFL-CIO, coordinates activity and provides resources to affiliated trade unions in the construction industry. It has over 380 state, local and provincial councils in the United States and Canada.

Open-End Investment Company - A corporation, trust or partnership registered under the Investment Company Act of 1940 that invests pooled shareholder dollars in securities appropriate to the organization’s objective. Also, referred to as a mutual fund, the open-end investment company stands ready to buy back its shares at their current net asset value. Most open-end investment companies continuously offer new shares to investors.

Parallel Shift - An increase or decrease in the level of interest rates where all maturities across the yield curve shift by the same amount.

Participant - An investor in the HIT.

Participation Certificate - A certificate that represents an undivided beneficial ownership interest in one or more mortgage loans and is issued by the mortgagee of record for such mortgage loan or loans.

Prospectus - The primary legal document offering securities or mutual fund shares for sale, required by the Securities Act of 1933. It must explain the offer, including the terms, issuer, investment objectives (if mutual fund) or planned use of the money (if securities), historical financial statements, and other information that could help investors decide whether the investment is appropriate for them.

Proxy - A written authorization given by a shareholder for someone else, usually the company's management, to cast his/her vote at a shareholder meeting or at another time.